Offer stands

British investors still want to rescue Barbados

Their original offer is now off the table, but as Barbados struggles to get out of an economic rut multi-millionaire investor and financier Andrew Stewart and his business partner Stuart Fordham say they are still willing to help.

At the end of 2014, Stewart, the chairman of the stockbroking and investment management firm Ravenscroft Limited, and Fordham, a bond trader, revealed their willingness to help the island raise up to US$1 billion through the issuance of bonds, given its dwindling reserves.

International investors Stuart Fordham (left) and Andrew Stewart

However, after about seven meetings over a seven-month period, including some with Minister of Finance Chris Sinckler, Central Bank Governor Dr DeLisle Worrell and Minister of International Business Donville Inniss, the offer, which was put on the table in the wake of a downgrade by the international credit ratings agency Standard & Poor’s (S&P), was refused.

One of the concerns of the Freundel Stuart administration was that even though the investors had initially suggested that their global partners were willing to purchase “large bonds” in any currency, the actual proposition was for the bonds to be issued in Euros.

However, if Government were willing to reopen the discussions, the bonds could be issued in US currency, Stewart said Thursday, adding that all he would need to do “just as we did two years go, we go and make a few telephone calls” to some of the major investors in the world.

“We would then chew that over in a couple of weeks and then we would come back with a firm proposition. And the proposition just like the previous proposition, would be underwritten by one of the major banks in the world,” he said, while stressing that there would need to be “a firm indication” from Government that they were willing to go through with it.

Fordham also cautioned that even though they were still willing to help the country, the conditions of the market were now different, including the level of interest rates.

“The time when we expressed to the ministers it was the best time. There was such a desire and a demand for yield and for interest. Other government bond markets around the world were in negative interest rates and so to be able to find something as attractive as an eight per cent yield was highly interesting,” he explained.

“I would say now that the fact is that ship has sailed. We didn’t hear back. We tabled a serious offer, Andy [Stewart] and I, for over US$1 billion. The timing was absolutely perfect. But that is not to say that another ship won’t come along, but it would look completely different. It would be a substantially different level of interest,” he added.

However, Fordham said on the positive side, more attractive investments were expected to become available internationally.

In terms of Barbados’ most recent downgrades, Fordham did not dismiss the regional rating agency CariCRIS out of hand.

However, he said the type of investors that he and Stewart were targetting were more likely to use Moody’s and S&P as their benchmark.

He therefore described S&P assessment of the island as “interesting” while not that the United States based ratings agency was still sticking to its decision to downgrade the island in September last year and that it has retained a negative outlook for Barbados due to a lack of projects getting started, high current account deficits and Government’s inability to improve its access to financing.

“Most interestingly for us was the Government’s decision not to tap the international credit markets, which was what Andy and I spoke to them about in 2014/2015 and tabled the offer. It was the perfect timing to do that. I think it is interesting to see that S&P has picked up on the fact that it has made a decision not to pursue those bonds,” he said.

In relation to the performance of the economy, Fordham said he was satisfied that things were “stabilizing” due to the solid performance of the tourism industry last year and projections for this year.

He said despite the current economic conditions, “if one is looking at the glass as half full as opposed to half empty, one might begin to make a statement that hopefully we might be able to build a base from here and move forward in a more positive [way]”.

While expressing his love for the island and pledging to make continued investments here, Stewart said the international investors and bond buyers had no interest in which political party was in power, but were concerned about the country’s ability to repay them and at the promised interest rate.

However, he warned that there was an unacceptably high level of bureaucracy that was negatively impacting investors, including some “major hotels” that would like to expand.

During the wide-ranging interview, he also said he believed the level of taxation here was way too high.

And while recalling the recent Sagicor relocation to Bermuda, Stewart suggested that Government looks at a possible tax incentive schemes to help keep companies here.  He also suggested that there should be “a green channel” in customs for travellers who have nothing to declare.

marlonmadden@barbadostoday.bb

11 Responses to Offer stands

  1. Gearbox1964 January 13, 2017 at 7:49 am

    David Estwick also proposed to broker a low-interest loan from the UAE a couple years back but his colleagues rejected…please ring de bell Fundel!!

    Reply
  2. BIG SKY January 13, 2017 at 7:55 am

    I Don’t Trust Wanna.”Anything too good to be true . . . . .”

    Reply
  3. Alex Alleyne January 13, 2017 at 8:34 am

    For SIX BILLION US DOLLARS i will go for it. Can’t be as bad a s”selling passports”.
    “TAKE THE MONEY AND RUN”.

    Reply
  4. Peter January 13, 2017 at 9:18 am

    Tony Web, I’m in touch with our good friend on this. He would like to know what you think. Bottom line here is TW, Nothing comes from nothing, and Nothing ever will. These goodly gentlemen are Investors. They only seek investment ventures that will yield huge profits most taxable unless they are sheltered and protected against currency devaluations. In international trading certain transactions are insured against certain liabilities and failure to follow procedures as agreed upon in their protocol of operations. I personally would like to see tangible or visible developments as these based on projections can enhance both stock value and other investors confidence. Many front door operations and I am NOT identifying Messers. Stewart nor Fordham as any of them, through well disguised illegal operations such as money laundering, and other forms of racketeering and movement of money all on paper. It can go deeper and large banks are sometimes used as carriers. Some people may please excuse me but sometimes I have no idea what I am speaking about.

    Reply
  5. Carson C Cadogan January 13, 2017 at 11:07 am

    This is far better than selling passports and citizenship as our Caribbean friends are doing and proud of it.

    Reply
  6. Hal Austin January 13, 2017 at 11:15 am

    Tell them to take it and shove it. They are not bringing anything exceptional to the table.
    If Sinckler and Worrell are that desperate I can introduce them to people in the City with bigger clout.
    Tell these jokers to take a jump. When I was at Financial Times Group I would not even have lunch with these two if they had offered to pay me.

    Reply
  7. Alex Alleyne January 13, 2017 at 11:34 am

    If anyone had said to me that an elected Government would bring Barbados to its lowest ebb, I would have said up front, “not in these modern times”, but low and behold Barbados going to the dogs and even becoming the laughing stock of the Caribbean. Who will save sweet BIM?, will it take GUNS to bring some sanity back to our loving Country…….I hope not. From being the face at the bottom of the well , we are soon going to be down and under.

    Reply
  8. jrsmith January 13, 2017 at 1:22 pm

    An american billionaire said a (US) dollar is a dollar, is a dollar dont matter where you are ,or who you are , it doesn’t behave any different it all adds up , test it and see ,its all laced with cocaine ..
    I still think we are lucky for the mess our politicians put us in ,that non bajans still want to help us .
    I am not comparing any country with Barbados , The great big one is 23 trillion up , we would be 1 billion up , so what ,are they going to take a big saw ,saw off a chunk of barbados and tow it away….
    The only frightening thing connecting with this sort of financing is our politicians who we cant trust from day to day.
    This loan with proper management ,barbados would come alive with strategic planning for the the next decade…
    Myself I sat down and think how I would manage (Barbados Ltd)……selecting my team, which I have on paper, my plan would be giving Barbados back to the people letting them have the say..

    Reply
  9. Tony Webster January 13, 2017 at 2:26 pm

    @Peter: sorry , I only just read your post. I support @Hal Austin: by their own admission (“we go and make some phone calls”), these folks are middlemen, or brokers) . One needs to know who will be holding our bonds-and necks. No way we should be taking money which is traceable to Putin, or worse. I am bordering my limit of competency here ( incompetency?) but it makes little sense to consolidate our external debt, at an interest cost directly related to our current ratings ! We need to do do with the blessings (if not formally, then at least with good graces and their forbearance) of both the I.M.F., AND the moody and standard-rich ( sorry) folks, inter alia, with the agreed rate “anticipating” the advantage to be a direct consequence of the re-organized external debt profile. With this “in hand” we can then consider the several large productive , growth-generating projects ,moles the unavoidable restructuring of the public sector, and privatizing some S.O.E.’s , so that the fresh external debt taken on to launch these will also be at lower , sustainable interest-rates. What we need to avoid at all costs, is to continue twiddling and twaddling for next 2-4 years ( which party is in power is of little consequence) and then try to restructure when global interest
    rates are climbing again!

    Yes, there is bit here of “which comes first, chicken, or egg”….but we needs separate very clearly, our friends from opportunists, particularly those who know neither God, nor democratic norms.

    Reply
  10. harry turnover January 13, 2017 at 8:39 pm

    In the picture,the person to the right is a man or a woman ? and is that a white skirt or white short pants I am seeing ? note how that same person crosses their legs.

    Reply
  11. Foolbert January 14, 2017 at 4:48 pm

    Had Barbados looked at a EURUSD chart back then they would have seen that EUR was already headed down strongly. So it was in fact a smart trade in Barbados’s favour.

    Reply

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